Fears over an impending fiscal cliff in the US dragged Indian IT stocks lower, with TCS, Infosys and Wipro dropping sharply.
Infosys was down 2.31%, TCS lost 1.51%, while Wipro shed 2 %.
Indian IT companies derive a significant chunk of their income from the US and fears that the country was heading for a fiscal cliff dragged Indian IT stocks lower.
Fiscal cliff" largely involves Bush-era tax cuts and major across-the-board spending cuts that are estimated to total $800 billion, which will take effect from January 1, 2013, unless lawmakers in the US, do something to change the course.
The fiscal cliff requires a sharp cut in a host of benefits and economists warn that it could lead to prolonged recession in the US, if there is no intervention. Recession in the US is certainly not good for Indian software companies that export goods and services to the country.